RNS Number : 0882P
Kitwave Group PLC
01 July 2025
1 July 2025
Kitwave Group plc
("Kitwave", the "Group" or the "Company")
Unaudited interim results for the six months ended 30 April 2025
Kitwave Group plc (AIM: KITW), the delivered wholesale business, is pleased to announce its unaudited interim results for the six months ended 30 April 2025 ("the period" or "H1 2025").
The tables and commentary below include comparatives for both the six months ended 30 April 2024 (H1 2024) and the 12 months ended 31 October 2024 (FY 2024).
Financial Highlights
· Revenues up 26.7% (3.1% like-for-like (2)) to £376.2 million (H1 2024: £297.0 million; FY 2024: £663.7 million).
· Consolidated gross margin up 1.1% to 22.6% (H1 2024: 21.5%; FY 2024: 22.3%).
· Adjusted operating profit(1) up 21.9% to £13.2 million (H1 2024: £10.8 million; FY 2024: £34.0m).
· Cash generation from operating activities of £19.6 million (H1 2024: £12.4 million; FY 2024: £31.4 million).
· Pre-tax operational cash conversion of 106% (H1 2024: 93%; FY 2024: 90%).
· Robust balance sheet with leverage reducing to 2.3x on the bank covenant basis (3)
· An increased interim dividend of 4.00 pence per share (H1 2024: 3.85 pence per share) for the six months to 30 April 2025. This dividend will be paid on 31 July 2025 to shareholders on the register at the close of business on 11 July 2025 and the ex-dividend date will be 10 July 2025.
Operational Highlights
· Retail and Wholesale division slightly outperformed expectations (like-for-like revenue +3.1%).
· Creed Foodservice integration ahead of timetable, with full benefits to be realised over the next two years.
· Operational integration of Total Foodservice with Miller Foodservice is on track and expected to be completed by the end of the financial year.
· The new South West distribution centre is operational with an associated increase in L4L rent (in the form of IRFS 16 depreciation) and rates of £0.4m for H1 25 and £0.8m full year compared to the prior year.
· As previously announced, the Group took the proactive decision to incur some additional operational investment in the new South West distribution centre. These costs were higher than expected to maintain service levels as the business transitioned from three separate locations into a single 80,000 sq. ft distribution centre and they are expected to continue into H2.
· Recent acquisitions and investment have significantly increased the scale of the Group's UK footprint and the addition of Creed has created a fully integrated national delivery network to support long term growth and achieve the optimal and most efficient cost to serve.
Outlook
· Since the pre-close trading update, the volatility in the macroeconomic backdrop has caused a more pronounced fragility in consumer confidence which is adversely affecting volumes in the destination leisure sector. Whilst footfall is up from the prior year, consumption is down in certain areas. This impact has been particularly visible in our higher margin tourism-based depots.
· Employer National insurance increases (c.£1.8m in FY25 and £2.7m in FY26) will increase the Group's costs during H2 of the financial year and beyond. The Group no longer believes it will be able to offset these tax increases.
· The combined effect of recent lower than expected foodservice consumption, continued investment in the South West and the employer National Insurance cost increases has resulted in the Directors revising their expectations for the financial performance of the Group during the current financial year and beyond.
· The Group now expects to report FY25 adjusted operating profit to be in the range of £38.0m to £40.5m.
Post-Period End
· Appointment of Dr Marnie Millard as Independent Non-Executive Chair, replacing Stephen Smith as of 30 May 2025.
Proposed change to accounting reference date
· The Board also announces its intention to change its accounting reference date from 31 October to 31 December.
· The Group's business activities and revenues are weighted toward the middle third of the calendar year and, having noted comments from shareholders, the Directors recognise that presenting financial statements that have a more balanced first half and second half weighting would be in the best interests of the Group.
· The Group intends to still publish accounts for the 12 months to 31 October 2025, unaudited, against expectations for clarity.
· A further announcement will be made on the change in accounting reference date once formally agreed.
Financial summary
H1 2025Unaudited £m
H1 2024 Unaudited £m
FY 2024 Audited £m
Revenue
376.2
297.0
663.7
Gross profit
85.1
63.7
147.8
Gross profit margin %
22.6%
21.5%
22.3%
Adjusted EBITDA(1)
21.1
15.9
45.2
Adjusted operating profit(1)
13.2
10.8
34.0
Profit before tax
5.6
6.9
22.5
Net cash inflow from operating activities
19.6
12.4
31.4
Pre-tax operational cash conversion(1)
106%
93%
90%
(1) For more information on alternative performance measures please see the glossary at the end of the announcement.
(2) Like-for-like revenue excludes revenue from Creed Foodservice but includes acquired revenue from Total Foodservice now financially integrated with Miller Foodservice.
(3) Bank covenant leverage is defined using debt that includes IFRS16 liabilities and earnings on LTM basis including LTM earnings on a proforma basis for acquired operations
Ben Maxted, Chief Executive Officer of Kitwave, commented:
"This period has seen record revenue and operating profits for Kitwave, underpinned by our continued strategic transformation and supported by the acquisition of Creed Foodservice, which has proven to be an excellent addition to the Group. Whilst we have navigated some operational changes, particularly the transition to a new, larger depot in the South West and the integration of multiple businesses, we are pleased with the solid progress made and the underlying strength of our Group.
"The acquisition and integration of Creed Foodservice, alongside recent investments in infrastructure, have strengthened our position as a nationwide, delivered foodservice business with a clear and active pipeline of organic growth opportunities. The Creed Foodservice investment has strengthened our management capabilities and advanced the Group's objective of delivering a more streamlined, scalable platform in the Foodservice marketplace. Our Retail and Wholesale division also performed well, benefitting from underlying consumer demand as the spring weather was favourable.
"As a result of some short-term additional operational investment relating to the new South West depot, the increase in employer National Insurance contributions and the macroeconomic backdrop detrimentally impacting consumer confidence and volumes in the destination leisure sector, the Board now anticipates that the Group's adjusted operating profit will be below current market expectations.
"The Group has a strong balance sheet with a highly cash generative business model. This is expected to lead to a reduction in absolute debt and continued reduction in leverage that will create capacity to reinvest in service-led growth initiatives. This financial strength provides the flexibility and resilience to continue pursuing our buy-and-build strategy, which we believe remains the right path forward in the current market landscape, albeit currently no acquisitions are expected during the remainder of the financial year.
"As we look ahead, we remain confident in our long-term outlook and our ability to deliver sustained value for all stakeholders. The fundamentals of our business remain strong, our strategy is clear, and we continue to execute with discipline and ambition."
- Ends-
For further information, please contact:
Kitwave Group plc Ben Maxted, Chief Executive Officer David Brind, Chief Financial Officer www.kitwave.co.uk
Tel: +44 (0) 191 259 2277
Canaccord Genuity Limited (Nominated Adviser and Sole Broker) Bobbie Hilliam Elizabeth Halley-Stott
Tel: +44 (0) 20 7523 8150
Yellow Jersey PR (Financial media and PR) Charles Goodwin Shivantha Thambirajah Bessie Elliot kitwave@yellowjerseypr.com
Tel: +44 (0) 20 3004 9512
Company Overview
Founded in 1987, following the acquisition of a single-site confectionery wholesale business based in North Shields, United Kingdom, Kitwave is a delivered wholesale business, specialising in selling and delivering impulse products, frozen, chilled and fresh foods, alcohol, groceries and tobacco to approximately 46,000, mainly independent, customers.
With a network of 37 depots, Kitwave is able to support delivery throughout the UK to a diverse customer base, which includes independent convenience retailers, leisure outlets, vending machine operators, foodservice providers and other wholesalers, as well as leading national retailers.
The Group's growth to date has been achieved both organically and through a strategy of acquiring smaller, predominantly family-owned, complementary businesses in the fragmented UK grocery and foodservice wholesale market.
Kitwave Group plc (AIM: KITW) was admitted to trading on AIM of the London Stock Exchange on 24 May 2021.
For further information, please visit: www.kitwave.co.uk.
Chief Executive Officer's statement
Introduction
It has been another period of operational progress across the Group during the first half of the financial year, with overall trading meeting the Board's expectations. As disclosed in our update in May, this was achieved despite weaker levels of demand from hospitality, which impacted the Foodservice division's performance earlier in the period, before then experiencing an improvement as we approached Easter. The revenue performance of the Retail & Wholesale division was robust, with positive like-for-like trading over the period.
Financial summary
H1 2025Unaudited £m
H1 2024Unaudited £m
FY 2024 Audited £m
Revenue
376.2
297.0
663.7
Gross profit
85.1
63.7
147.8
Gross profit margin %
22.6%
21.5%
22.3%
Operating profit
10.3
9.3
28.8
Operating margin %
2.7%
3.1%
4.3%
In the six months to 30 April 2025, the Group achieved revenue of £376.2 million (H1 2024: £297.0 million; FY 2024: £663.7 million) and an operating profit of £10.3 million (H1 2024: £9.3 million; FY 2024: £28.8 million).
To protect customer service during the transition to the new South West depot, the Group took the decision to incur some additional, short-term costs, investing above the level that it had initially planned in service delivery. Excluding these costs, the Group's cost base remained in line with expectations and includes the increased depreciation levels from fleet investment over recent periods. The Group continues to look to drive synergy and operational efficiency benefits to mitigate ongoing cost headwinds, such as national insurance increases.
Basic earnings per ordinary share was 5.1 pence (30 April 2024: 7.3 pence). Despite an increase in operating profit and EBITDA, the reduction in basic earnings per ordinary share is primarily as a result of the increase in share capital and the increase in interest costs, associated with the funding required for the acquisitions in the prior period and that are recognised on a linear basis as opposed to the H2 weighting of profitability from the associated acquisitions.
Cash generation remained strong in the period with £19.6 million generated from operating activities (H1 2024: £12.4 million; FY 2024: £31.4 million).
The Group's cash and cash equivalents increased by £0.2 million during the period, after cash outflows to satisfy debt service payments and dividends paid. This included cash generated from operations of £19.6 million.
The Group's balance sheet as of 30 April 2025 had reserves of £123.2 million (30 April 2024: £85.0 million; 31 October 2024: £124.5 million) and net debt of £128.3 million (30 April 2024: £83.9 million; 31 October 2024: £127.8 million).
Net debt has increased by £0.5 million since the year-end 31 October 2024 after the net cash outflow of £5.0m, relating to the amount payable for the Creed Catering Supplies Limited acquisition. Positive trading and working capital control has mitigated this cash outflow, reducing leverage to 2.5x (30 April 2024: 2.0x; 31 October 2024: 2.8x).
The Group's bank covenant for leverage includes a proforma profitability for part period acquisitions and on this basis, leverage is 2.3x as at 30 April 2025 (30 April 2024:1.9x; 31 October 2024: 2.4x). It is expected that the strong continued cash generation of the Group, alongside the second half weighting of the Group's financial performance, will drive the principal debt down during the remainder of the current financial year. The Board is committed to maintaining a prudent leverage policy moving forward.
Divisional summary
Set out below is the financial performance of the business by division:
H1 2025Unaudited £m
H1 2024Unaudited £m
FY 2024 Audited £m
Group revenue
376.2
297.0
663.7
Ambient
98.1
99.1
204.6
Frozen & Chilled
112.1
104.9
235.5
Retail & wholesale
210.2
204.0
440.1
Foodservice
166.0
93.0
223.6
Corporate
-
-
-
Group adjusted EBITDA(4)
21.1
15.9
45.2
Ambient
5.8
5.7
13.1
Frozen & Chilled
5.4
4.9
15.2
Retail & wholesale
11.2
10.6
28.3
Foodservice
12.5
7.9
22.8
Corporate
(2.6)
(2.6)
(5.9)
Group adjusted operating profit(4)
13.2
10.8
34.1
Ambient
4.8
4.7
11.1
Frozen & Chilled
2.8
2.6
10.4
Retail & wholesale
7.6
7.3
21.5
Foodservice
8.3
6.2
18.7
Corporate
(2.7)
(2.7)
(6.1)
(4) Group and divisional EBITDA and operating profit/(loss) adjusted for management charge, acquisition, amortisation of intangible assets arising on acquisition, share-based payments and compensation for post-combination services. For more information on alternative performance measures please see the glossary at the end of the announcement.
Retail & Wholesale division
The Group's Ambient and Frozen & Chilled product businesses, which both service the Retail & Wholesale sector of the grocery market, saw combined revenue increase by 3.1% to £210.2 million (H1 2024: £204.0 million). The growth was supported by new customers as well as higher ice cream sales, which coincided with the prolonged drier weather through April 2025 compared to the same month in the prior year.
Foodservice division
Set out below is the financial performance of the division for the period included in the like for like is revenue and associated profit from Total Foodservice (TFS) that is now within the combined business numbers for Miller Foodservice because of the financial integration of the two businesses:
H1 2025Unaudited £m
H1 2024Unaudited £m
Divisional revenue
166.0
93.0
Like for like (including TFS)
96.0
93.0
Creed
70.0
H1 2025Unaudited £m
H1 2024Unaudited £m
Divisional adjusted EBITDA(4)
12.5
7.9
Like for like (including TFS)
6.5
7.9
Creed
6.0
H1 2025Unaudited £m
H1 2024Unaudited £m
Divisional adjusted operating profit(4)
8.3
6.2
Like for like (including TFS)
3.8
6.2
Creed
4.5
Foodservice's customer base comprises of independent traditional foodservice outlets including bars, restaurants and leisure outlets, as well as the care home and education sectors. Whilst this diverse customer mix means that the division is not overly weighted to one sector, its performance was impacted by softer demand from leisure and hospitality customers. The like-for-like revenues were c.£96.0 million for the period (including the full period revenues from TFS), resulting in reported like-for-like sales increasing by 3% to £96 million. Although there was a slight improvement in sales during April 2025, which coincided with a period of warm weather, demand remained soft, most notably in the South West region, where many of the destination venues serving food are reliant on tourists and holiday-home owners.
The move to the South West depot incurred some unplanned costs in the period and reflects the additional right of use asset depreciation, with two freeholds being replaced by the new leasehold premises.
Operational review
The integration of Creed Foodservice and the opening of the Group's new 80,000 sq. ft Foodservice distribution centre in the South West have been the key operational projects during the period.
The acquisition of Creed has enabled the Group to now have a national foodservice network. This has provided both immediate customer opportunities and distribution efficiencies. Since the completion in September 2024, we have embarked on a significant integration programme. The available benefits and synergies of the integration have been identified and are scheduled to be realised over the next two years. The Board expects to see some of these initial benefits to start contributing in H1 2026, whilst the full integration onto the Group's ERP system is planned to be completed in early 2026.
The new South West depot has enabled the Group to consolidate three sites into one as part of the integration of WestCountry and M.J. Baker. The Company believes that the scale and capabilities of the new site will provide both longer-term capacity for growth and the ability to cross-sell by providing the full Kitwave product offering. Following the move to the new depot, a period of transition was anticipated with some senior management changes and the combined teams needing to familiarise themselves with the new site. Whilst the IT implementation was very smooth, the integration of business processes, routes and range has taken longer than anticipated. This combined with a general reduction in visitor numbers in the region and pressure on consumer spending following the 2024 Autumn budget has resulted in the turnover levels and margin being below our expectations. The higher-than-expected costs are being worked through but are expected to impact FY25 and the start of FY26 with expected integration costs to fall away by the end of H1 26.
Strategy
Kitwave is currently the 15th largest grocery and foodservice wholesaler in the UK in terms of market share but only services circa five percent of the potential market opportunity of circa £10.7bn. It is well documented that the UK wholesale market is highly fragmented, which presents opportunities for the Group to pursue strategic acquisitions to strengthen its existing business lines and capitalise on synergies. Since 2011, the Group has completed 15 acquisitions.
The high levels of cash generation and the developing national footprint in foodservice leaves us in a great position to continue to add complementary strategic foodservice businesses to this growing platform. Geographic capability and scale, we believe, will yield synergies and grow operating margins over the long term.
The Group continues to invest in technology, systems and infrastructure to support its organic growth objectives. Investment has been made in voice-picking technology to deliver greater efficiencies and obtain the highest level of customer service. The trading platform continues to be expanded, enhancing order capability and customer engagement.
Dividend
The Board has declared an increased interim dividend of 4.00 pence per share (H1 2024: 3.85 pence per share) for the six months to 30 April 2025. This dividend will be paid on 31 July 2025 to shareholders on the register at the close of business on 11 July 2025 and the ex-dividend date will be 10 July 2025.
Outlook
We have built an excellent platform for growth within the UK wholesale market. With our focused growth strategy, both organic and through acquisitions, we believe that we continue to be well-placed to deliver value for the Group and its shareholders.
It has been widely reported that UK consumer confidence remains subdued. Whilst concerns over significantly higher trade tariffs have eased, consumers continue to be conscious of higher living costs. Despite experiencing improvement in the Foodservice division in April, post-period sales have remained lower than expected with the business weighted to the second half of the year. Coupled with the additional one-off costs, the Group now expects financial performance to be impacted against the previous expectations forecast.
Despite these near-term challenges, Kitwave remains a fundamentally strong business with a good pipeline of operational synergies and growth opportunities. The Group's focus remains on service excellence, operational improvement, and disciplined cost management.
Ben Maxted
Chief Executive Officer
1 July 2025
Condensed consolidated statement of profit and loss and other comprehensive income
Note
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Revenue
2
376,209
296,960
663,652
Cost of sales
(291,084)
(233,223)
(515,832)
Gross profit
85,125
63,737
147,820
Other operating income
3
85
98
603
Distribution expenses
(39,564)
(27,949)
(63,473)
Administrative expenses
(35,364)
(26,590)
(56,146)
Operating profit
10,282
9,296
28,804
Analysed as:
Adjusted EBITDA
21,067
15,863
45,229
Amortisation of intangible assets
4
(1,788)
(557)
(1,527)
Depreciation
4
(7,781)
(4,967)
(11,068)
Acquisition expenses
4
-
(416)
(2,153)
Compensation for post combination services
4
(79)
(79)
(324)
Share based payment expense
4
(634)
(548)
(1,244)
Restructuring expenses
4
(503)
-
(109)
Total operating profit
10,282
9,296
28,804
Finance expenses
(4,708)
(2,417)
(6,276)
Profit before tax
5,574
6,879
22,528
Tax on profit on ordinary activities
(1,397)
(1,796)
(5,810)
Profit for the financial period
4,177
5,083
16,718
Other comprehensive income
-
-
-
Total comprehensive income for the period
4,177
5,083
16,718
Basic earnings per share (pence)
5
5.1
7.3
23.5
Diluted earnings per share (pence)
5
5.1
6.9
22.5
Condensed consolidated balance sheet
30 April 2025 Unaudited
30 April 2024 Unaudited
31 October 2024 Audited
£000
£000
£000
Non-current assets
Goodwill
105,717
70,090
105,717
Intangible assets
28,935
8,112
30,554
Tangible assets
28,316
22,767
29,096
Right-of-use assets
52,956
32,611
50,869
Investments
27
61
42
215,951
133,641
216,278
Current assets
Inventories
56,102
53,836
47,749
Trade and other receivables
102,634
75,677
91,122
Cash and cash equivalents
4,337
5,015
4,137
163,073
134,528
143,008
Total assets
379,024
268,169
359,286
Current liabilities
Other interest bearing loans and borrowings
(30,935)
(33,125)
(27,821)
Lease liabilities
(11,104)
(7,020)
(10,244)
Trade and other payables
(118,535)
(90,729)
(102,083)
Tax payable
(657)
(1,217)
(1,127)
(161,231)
(132,091)
(141,275)
Non-current liabilities
Other interest bearing loans and borrowings
(40,000)
(20,000)
(40,000)
Lease liabilities
(44,785)
(28,116)
(43,323)
Deferred tax liabilities
(9,846)
(2,956)
(10,143)
(94,631)
(51,072)
(93,466)
Total liabilities
(255,862)
(183,163)
(234,741)
Net assets
123,162
85,006
124,545
Equity attributable to equity holders of the Parent Company
Called up share capital
836
701
804
Share premium account
97,376
64,349
94,185
Consolidation reserve
(33,098)
(33,098)
(33,098)
Share based payment reserve
689
2,576
3,240
Retained earnings
57,359
50,478
59,414
Equity
123,162
85,006
124,545
Condensed consolidated statement of change in equity
Called up share capital
Share premium account
Consolidation reserve
Share based payment reserve
Profit and loss account
Total equity
£000
£000
£000
£000
£000
£000
Balance at 1 November 2023 (audited)
700
64,183
(33,098)
2,042
50,618
84,445
Total comprehensive income for the 6 month period
Profit
-
-
-
-
5,083
5,083
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income for the 6 month period
-
-
-
-
5,083
5,083
Transaction with owners, recorded directly in equity
New share issuance
1
166
-
-
-
167
Dividends
-
-
-
-
(5,223)
(5,223)
Share based payment expense
-
-
-
534
-
534
Total contribution by and transactions with the owners
1
166
-
534
(5,223)
(4,522)
Balance at 30 April 2024 (unaudited)
701
64,349
(33,098)
2,576
50,478
85,006
Total comprehensive income for the 6 month period
Profit
-
-
-
-
11,635
11,635
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income for the 6 month period
-
-
-
-
11,635
11,635
New share issuance
103
31,397
-
-
-
31,500
Costs directly attributable to new shares issues
-
(1,561)
-
-
-
(1,561)
Dividends
-
-
-
-
(2,699)
(2,699)
Share based payment expense
-
-
-
664
-
664
Total contribution by and transactions with the owners
103
29,836
-
664
(2,699)
27,904
Balance at 31 October 2024 (audited)
804
94,185
(33,098)
3,240
59,414
124,545
Total comprehensive income for the 6 month period
Profit
-
-
-
-
4,177
4,177
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income for the 6 month period
-
-
-
-
4,177
4,177
Transaction with owners, recorded directly in equity
New share issuance
32
3,191
-
(3,104)
-
119
Dividends
-
-
-
-
(6,232)
(6,232)
Share based payment expense
-
-
-
553
-
553
Total contribution by and transactions with the owners
32
3,191
-
(2,551)
(6,232)
(5,560)
Balance at 30 April 2025 (unaudited)
836
97,376
(33,098)
689
57,359
123,162
Condensed consolidated cash flow statement
Note
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Cash flow from operating activities
Profit for the period
4,177
5,083
16,718
Adjustments for:
Depreciation and amortisation
9,569
5,524
12,595
Financial expense
4,708
2,417
6,276
Profit on sale of property, plant and equipment
(75)
(74)
(573)
Net gain on remeasurement of right-of-use assets and lease liabilities
(12)
(29)
(30)
Compensation for post combination services
79
79
324
Equity settled share based payment expense
634
548
1,244
Taxation
1,397
1,796
5,810
20,477
15,344
42,364
(Increase) in trade and other receivables
(11,512)
(9,398)
(8,712)
(Increase) in inventories
(8,353)
(15,584)
(2,392)
Increase in trade and other payables
21,194
23,952
6,755
21,806
14,314
38,015
Tax paid
(2,164)
(1,911)
(6,612)
Net cash inflow from operating activities
19,642
12,403
31,403
Cash flows from investing activities
Acquisition of property, plant and equipment
(1,308)
(3,768)
(7,275)
Proceeds from sale of property, plant and equipment
151
143
3,513
Payment of compensation for post combination services
-
(424)
-
Acquisition of subsidiary undertakings (including overdrafts and cash acquired)
2
(5,000)
(19,370)
(73,329)
Net cash outflow from investing activities
(6,157)
(23,419)
(77,091)
Cash flows from financing activities
Issuance of new shares
120
167
30,106
Proceeds from new loan
-
-
20,000
Net movement in bank trade loan
(7,750)
3,000
7,750
Net movement in invoice discounting
10,864
23,720
13,666
Interest paid
(4,612)
(2,417)
(6,121)
Repayment of lease liabilities
(5,675)
(3,889)
(8,327)
Dividends paid
(6,232)
(5,223)
(7,922)
Net cash (outflow)/inflow from financing activities
(13,285)
15,358
49,152
Net increase in cash and cash equivalents
200
4,342
3,464
Opening cash and cash equivalents
4,137
673
673
Cash and cash equivalents at period end
4,337
5,015
4,137
Notes
1 Accounting policies
Kitwave Group plc (the "Company") is a public company limited by shares and incorporated, domiciled and registered in England in the UK. The registered number is 9892174 and the registered address is Unit S3, Narvik Way, Tyne Tunnel Trading Estate, North Shields, Tyne and Wear, NE29 7XJ.
The Company's principal activity is to act as a holding company for its subsidiaries (together "the Group"), which together make up the Group's consolidated financial information.
The condensed consolidated financial information presented in this statement for the six months ended 30 April 2025 and the comparative figures for the six months ended 30 April 2024 are neither audited nor reviewed.
The comparative financial information in the condensed consolidated financial information in respect of the year ended 31 October 2024 have been extracted from the 2024 financial statements. The statutory accounts for the year ended 31 October 2024 have been delivered to the Registrar of Companies and the report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The condensed consolidated financial information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and does not include all the information required for the full annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements.
There have been no new accounting standards or changes to existing accounting standards applied for the first time which have a material effect on these interim results.
1.1 Critical accounting estimates and judgements
The critical accounting estimates and judgements affecting the Group are unchanged from those set out in the Group's last annual consolidated financial statements for the year ended 31 October 2024.
The Directors have reviewed financial forecasts and are satisfied that the Group has sufficient levels of financial resources available to both fund operations and to pursue its stated growth strategy. The Directors are confident that the Group will have sufficient funds to meet its liabilities as they fall due for the foreseeable future and therefore adopt the going concern basis in preparing the condensed consolidated interim financial information.
1.2 Accounting policies
The accounting policies applied in preparing the condensed consolidated interim financial information are the same as those applied in the preparation of the consolidated financial statements for the year ended 31 October 2024, as described in those financial statements.
2 Segmental information
The following analysis by segment is presented in accordance with IFRS 8 on the basis of those segments whose operating results are regularly reviewed by the Executive Board (the Chief Operating Decision Maker as defined by IFRS 8) to assess performance and make strategic decisions about allocation of resources
The Group has the following operating segments:
· Ambient: Provides delivered wholesale of ambient food, drink and tobacco products;
· Frozen & Chilled: Provides delivered wholesale of frozen and chilled food products; and
· Foodservice: Provides delivered wholesale of alcohol, frozen and chilled food to trade customers.
Corporate contains the central functions that are not devolved to the business units
These segments offer different products that attract different margins. They each have separate management teams.
The segments share a commonality in service being delivered wholesale of food and drink products. The Group therefore benefits from a range of expertise, cross-selling opportunities and operational synergies in order to run each segment as competitively as possible.
The Group's forward-looking strategy is to provide enhanced customer service by making available the wider Group product range to its existing customer base. As a result, the Board assess the segments based on customer type with the customers in the Ambient and Frozen & Chilled divisions operating in the retail and wholesale channels.
The following analysis shows how this is monitored whilst demonstrating the link to the previously reported segmental information which continues to be monitored by the Board alongside the segments based on customer type.
Each segment is measured on its adjusted operating profit and internal management reports are reviewed monthly by the Board. This performance measure is deemed the most relevant by the Board to evaluate the results of the segments relative to entities operating in the same industry.
2 Segmental information (continued)
Six months ended 30 April 2025
Ambient
Frozen & Chilled
Total retail & wholesale
Foodservice
Corporate
Total
£000
£000
£000
£000
£000
£000
Revenue
98,127
112,113
210,240
165,969
-
376,209
Inter-segment revenue
9,601
1,698
11,299
1,290
-
12,589
Segment revenue
107,728
113,811
221,539
167,259
-
388,798
Segment gross profit
14,963
23,095
38,058
47,067
-
85,125
Adjusted EBITDA*
5,774
5,419
11,193
12,455
(2,581)
21,067
Amortisation of intangibles
-
(35)
(35)
(15)
(26)
(76)
Depreciation
(1,031)
(2,568)
(3,599)
(4,111)
(71)
(7,781)
Adjusted operating profit*
4,743
2,816
7,559
8,329
(2,678)
13,210
Group management charge
(734)
(1,026)
(1,760)
(1,376)
3,136
-
Amortisation of intangible assets arising on acquisition
-
-
-
-
(1,712)
(1,712)
Compensation for post combination services
-
(79)
(79)
-
-
(79)
Share based payment expense
-
-
-
-
(634)
(634)
Restructuring costs
-
(77)
(77)
(394)
(32)
(503)
Interest expense
(626)
(1,015)
(1,641)
(1,392)
(1,675)
(4,708)
Segment profit/(loss) before tax
3,383
619
4,002
5,167
(3,595)
5,574
Segment assets
52,604
76,599
129,203
147,156
102,665
379,024
Segment liabilities
(37,492)
(72,975)
(110,467)
(86,873)
(58,522)
(256,862)
Segment net assets
15,112
3,624
18,736
60,283
44,143
123,162
Within Corporate assets is £115,717,000 of goodwill on consolidation. This is allocated to the trading segments as follows:
Goodwill by segment
13,516
12,539
26,055
79,662
-
105,717
2 Segmental information (continued)
Six months ended 30 April 2024
Ambient
Frozen & Chilled
Total retail & wholesale
Foodservice
Corporate
Total
£000
£000
£000
£000
£000
£000
Revenue
99,073
104,933
204,006
92,954
-
296,960
Inter-segment revenue
9,198
1,878
11,076
449
-
11,525
Segment revenue
108,271
106,811
215,082
93,403
-
308,485
Segment gross profit
15,017
22,721
37,738
25,999
-
63,737
Adjusted EBITDA*
5,694
4,936
10,630
7,875
(2,642)
15,863
Amortisation of intangibles
-
(31)
(31)
(3)
(26)
(60)
Depreciation
(952)
(2,310)
(3,262)
(1,643)
(62)
(4,967)
Adjusted operating profit*
4,742
2,595
7,337
6,229
(2,730)
10,836
Group management charge
(734)
(1,026)
(1,760)
(1,377)
3,137
-
Amortisation of intangible assets arising on acquisition
-
-
-
-
(497)
(497)
Acquisition expense
-
-
-
(416)
-
(416)
Compensation for post combination services
-
(79)
(79)
-
-
(79)
Share based payment expense
-
-
-
-
(548)
(548)
Interest expense
(471)
(613)
(1,084)
(436)
(897)
(2,417)
Segment profit/(loss) before tax
3,537
877
4,414
4,000
(1,535)
6,879
Segment assets
52,081
74,670
126,751
69,468
71,910
268,129
Segment liabilities
(39,812)
(75,410)
(115,222)
(46,250)
(21,651)
(183,123)
Segment net assets
12,269
(740)
11,529
23,218
50,259
85,006
Within Corporate assets is £70,090,000 of goodwill on consolidation. This is allocated to the trading segments as follows:
Goodwill by segment
13,516
12,499
26,015
44,075
-
70,090
2 Segmental information (continued)
Year ended 31 October 2024
Ambient
Frozen & Chilled
Total retail & wholesale
Foodservice
Corporate
Total
£000
£000
£000
£000
£000
£000
Revenue
204,568
235,511
440,079
223,573
-
663,652
Inter-segment revenue
18,463
4,355
22,818
1,242
-
24,060
Segment revenue
223,031
239,866
462,897
224,815
-
687,712
Segment gross profit
31,613
52,353
83,966
63,854
-
147,820
Adjusted EBITDA*
13,125
15,215
28,340
22,797
(5,908)
45,229
Amortisation of intangibles
-
(74)
(74)
(6)
(50)
(130)
Depreciation
(2,010)
(4,781)
(6,791)
(4,118)
(159)
(11,068)
Adjusted operating profit*
11,115
10,360
21,475
18,673
(6,117)
34,031
Group management charge
(1,968)
(2,051)
(4,019)
(2,751)
6,770
-
Amortisation of intangible assets arising on acquisition
-
-
-
-
(1,397)
(1,397)
Acquisition expense
-
-
-
(447)
(1,706)
(2,153)
Compensation for post combination services
-
(324)
(324)
-
-
(324)
Share based payment expense
-
-
-
-
(1,244)
(1,244)
Restructuring costs
-
(103)
(103)
(6)
-
(109)
Interest expense
(1,099)
(1,948)
(3,047)
(1,204)
(2,025)
(6,276)
Segment profit/(loss) before tax
8,048
5,934
13,982
14,265
(5,719)
22,528
Segment assets
49,876
61,691
111,567
111,927
135,792
359,286
Segment liabilities
(37,363)
(58,531)
(95,894)
(79,212)
(59,635)
(234,741)
Segment net assets
12,513
3,160
15,673
32,715
76,157
124,545
Within Corporate assets is £105,717,000 of goodwill on consolidation. This is allocated to the trading segments as follows:
Goodwill by segment
13,516
12,539
26,055
79,662
-
105,717
An analysis of revenue by destination is given below:
Geographical information:
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
United Kingdom
374,317
294,738
659,833
Overseas
1,892
2,222
3,819
Group revenue
376,209
296,960
663,652
No one customer accounts for more than 7% (H1 2024: 10%; FY 2024: 8%) of Group revenue.
3 Other operating income
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Net gain on disposal of fixed assets
75
74
573
Net gain on remeasurement of right-of-use assets and lease liabilities
12
29
30
Net (loss) on foreign exchange
(2)
(5)
-
85
98
603
4 Expenses
Included in profit/loss are the following:
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Depreciation of tangible assets:
Owned
2,027
1,343
3,052
Right-of-use assets
5,754
3,624
8,016
Amortisation of intangible assets
1,788
557
1,527
Expenses relating to short term leases and low value assets
1,416
1,327
2,155
Impairment loss on trade receivables
267
62
-
The Group incurred a number of expenses not relating to the principal trading activities of the Group as follows:
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
Exceptional expenses
£000
£000
£000
Acquisition expenses
-
416
2,153
Compensation for post combination services
79
79
324
Restructuring expenses
503
-
109
Total exceptional expenses
79
495
2,586
Share based payment expense
634
548
1,244
Total exceptional expenses and share based payments
713
1,043
3,830
The Board consider the exceptional items to be non-recurring in nature. Both exceptional and share-based payment expenses are adjusted for in the statement of profit and loss to arrive at the adjusted EBITDA. This measure provides the Board with a better understanding of the Group's operating performance.
Acquisition expenses in both prior periods include the legal and professional fees connected to the acquisition of WLG (Holdings) Limited, Total Foodservice Solutions Limited and Creed Catering Supplies Limited.
Compensation for post-combination services relates to the value of a liability in connection the acquisition of the remaining share capital of Central Supplies (Brierley Hill) Ltd which is subject to an agreement to acquire which can now be called at any time.
Share-based payments relate to the Management Incentive Plan ("MIP") and Long-Term Incentive Plan ("LTIP") and are non-cash expenses.
Restructuring expenses in the period relate to redundancy and operational restructuring costs across the Foodservice and Frozen & Chilled divisions.
5 Earnings per share
Basic earnings per share
Basic earnings per share for the six-month period ending 30 April 2025, and the previous six-month period ending 30 April 2024 and the year ended 31 October 2023 is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during each period as calculated below.
Diluted earnings per share
Diluted earnings per share for the six-month period ending 30 April 2025, and the previous six-month period ending 30 April 2024 and the year ended 31 October 2024 is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares, adjusted for the effects of all dilutive potential ordinary shares. In this case dilutive potential ordinary shares include issued equity warrants outstanding during each period and shares that may vest under the terms of equity incentive plans, as calculated below.
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Profit attributable to all shareholders
4,177
5,083
16,718
pence
pence
pence
Basic earnings per ordinary share
5.1
7.1
23.5
Diluted earnings per ordinary share
5.1
6.9
22.5
Weighted average number of ordinary shares
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
Number
Number
Number
Weighted average number of ordinary shares (basic) during the period
81,418,361
70,032,967
71,034,498
Weighted average number of ordinary shares (diluted) during the period
81,571,828
73,158,081
74,453,758
Adjusted earnings per share
Adjusted earnings per share is calculated below on the grounds that it is a metric used by the market in monitoring the Group and similar businesses. These figures are relevant to the Group and are provided to enable comparison to similar businesses. Amortisation of acquired intangibles and share based payment charges are deemed to be non-cash at the pint of recognition, and exceptional items by their very nature are considered non-recurring by the Board. Together with acquisition costs, these are excluded to derive the adjusted earnings per share and to assist with the understanding of underlying trading.
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Profit attributable to all shareholders
4,177
5,083
16,718
Exceptional and share based payment expenses net of tax
2,216
1,279
4,559
Adjusted profit attributable to ordinary shareholders
6,393
6,362
21,277
pence
pence
pence
Basic adjusted earnings per ordinary share
7.9
9.1
30.0
For more information on this alternative performance measure, please see the glossary at the end of the announcement.
Alternative performance measure glossary
This report provides alternative performance measures ("APMs"), which are note defined or specified under the requirements of International Financial Reporting Standards. The Board believes that these APMs provide readers with important additional information on the Group.
Alternative performance measure
Definition and purpose
Adjusted operating profit
Represents the operating profit prior to exceptional expenses, share based payment expenses and amortisation of intangible assets recognised on acquisitions. This measure is consistent with how the Group measures performance and is reported to the Board.
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Total operating profit
10,282
9,296
28,804
Amortisation of intangible assets arising on acquisition
1,712
497
1,397
Acquisition expenses
-
416
2,153
Compensation for post combination services
79
79
324
Share based payment expense
634
548
1,244
Restructuring expenses
503
-
109
Adjusted operating profit
13,210
10,836
34,031
Adjusted EBITDA
Represents the operating profit prior to exceptional (income) / expenses, share based payment expenses, fixed asset depreciation and intangible amortisation. This measure is consistent with how the Group measures trading and cash generative performance and is reported to the Board.
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Total operating profit
10,282
9,296
28,804
Amortisation of intangible assets
1,788
557
1,527
Depreciation
7,781
4,967
11,068
Acquisition expenses
-
416
2,153
Compensation for post combination services
79
79
324
Share based payment expense
634
548
1,244
Restructuring expenses
503
-
109
Adjusted EBITDA
21,067
15,863
45,229
Pre-tax operational cash conversion
Represents the cash generated from operating activities pre tax as a proportion of cash flow from operating activities pre movements in working capital and tax. This measure informs the Board of the Group's cash conversion from operating activities and is used to monitor liquidity by the Board.
6 months ended 30 April 2025 Unaudited
6 months ended 30 April 2024 Unaudited
Year ended 31 October 2024 Audited
£000
£000
£000
Net cash inflow from operating activities
19,642
12,403
31,403
Tax paid
2,164
1,911
6,612
Cash flow from operating activities pre-tax and compensation for post combination services (1)
21,806
14,314
38,015
Movement in working capital
(1,329)
1,030
4,349
Cash flow from operating activities pre-tax and compensation for post combination services and movement in working capital (2)
20,477
15,344
42,364
Pre-tax operational cash conversion (1) divided by (2)
106%
93%
90%
After tax return on invested capital
Represents adjusted profit after tax for the 12 months ending on the period end date as a proportion of invested capital as at the period end date. This measure informs the Board of how effective the Group is in generating returns from the capital invested.
LTM ended 30 April 2025 Unaudited
LTM ended 30 April 2024 Unaudited
31 October 2024 Audited
£000
£000
£000
Adjusted operating profit
36,405
31,111
34,031
Operating lease interest
(2,929)
(1,837)
(2,167)
33,476
29,274
31,864
Tax charge at effective rate of tax of 25% (2024: 25%)
(8,369)
(7,319)
(7,966)
Adjusted operating profit after tax (1)
25,107
21,955
23,898
Invested capital comprising:
Invoice discounting facilities
30,935
30,125
20,071
Lease liabilities
55,889
35,136
53,567
Revolving Credit Facility
40,000
20,000
40,000
Trade loan
-
3,000
7,750
Share capital
836
701
804
Share premium
97,376
64,349
94,185
Lesscash at bank and in hand
(4,337)
(5,015)
(4,137)
Total invested capital (2)
220,699
148,296
212,240
After tax return on invested capital (1) divided by (2)
11%
15%
11%
Return on net assets
Represents adjusted profit after tax as a proportion of the Group's investment in fixed assets and working capital. This measure informs the Board of how effective the Group is in generating returns from its fixed assets and net working capital.
LTM ended 30 April 2025 Unaudited
LTM ended 30 April 2024 Unaudited
31 October 2024 Audited
£000
£000
£000
Adjusted operating profit
36,405
31,111
34,031
Tax charge at effective rate of tax of 25% (2024: 25%)
(9,101)
(7,778)
(8,508)
Adjusted operating profit after tax (1)
27,304
23,333
25,523
Fixed assets and net working capital comprising:
Intangible assets*
710
663
618
Fixed assets
28,316
22,767
29,096
Right-of-use assets
52,956
32,611
50,869
Investments
27
61
42
Inventories
56,102
53,836
47,749
Trade and other receivables
102,634
75,677
91,122
Trade and other payables
(118,535)
(90,729)
(102,083)
Liability for post combination services**
985
661
906
Total invested capital (2)
122,485
94,884
118,319
After tax return on invested capital (1) divided by (2)
22%
25%
22%
*excluding acquired intangibles arising on acquisition **adjustment to exclude the liability for post combination services from trade and other payables
Leverage
Management assess leverage by reference to adjusted EBITDA against net debt including and excluding IFRS 16 lease liabilities and including the liability for post combination services held within other creditors. This indicates how much income is available to service debt before interest, tax, depreciation and amortisation.
30 April 2025 Unaudited
30 April 2024 Unaudited
31 October 2024 Audited
£000
£000
£000
Adjusted EBITDA
50,433
40,987
45,229
Invoice discounting advances
30,935
30,125
20,071
Lease liabilities
55,889
35,136
53,567
Revolving Credit Facility
40,000
20,000
40,000
Trade loans
-
3,000
7,750
Liability for post combination services
985
661
906
Contingent consideration
4,870
-
9,614
Cash at bank and in hand
(4,337)
(5,015)
(4,137)
Net debt
128,342
83,907
127,771
Leverage (including IFRS 16 debt)
2.5
2.0
2.8
IFRS 16 lease liabilities
43,742
26,462
43,151
Net debt excluding IFRS 16 lease liabilities
84,600
57,445
84,620
Leverage (excluding IFRS 16 lease debt)
1.7
1.4
1.9
In addition to the assessment of leverage as aligned to the bank leverage covenant calculation including all lease liabilities, Management also assess leverage excluding lease liabilities arising on application of IFRS 16. Included in the above are the total lease liabilities, and separately those arising on application of IFRS 16 ("IFRS 16 lease liabilities") to calculate both metrics.
Adjusted earnings per share
Profit attributable to the equity holders of the Group prior to exceptional items and share based payments through the consolidated statement of profit and loss, divided by the weighted average number of ordinary shares during the financial year.
30 April 2025 Unaudited
30 April 2024 Unaudited
31 October 2024 Audited
£000
£000
£000
Profit attributable to all shareholders
4,177
5,083
16,718
Amortisation of intangible assets arising on acquisition
1,712
497
1,397
Acquisition expenses
-
416
2,153
Compensation for post combination services
79
79
324
Share based payment expense
634
548
1,244
Restructuring expenses
503
-
109
Tax effect of above items
(712)
(261)
(668)
Adjusted profit attributable to ordinary shareholders
6,393
6,362
21,277
Number
Number
Number
Weighted average number of ordinary shares (basic) during the period
81,418,361
70,32,967
71,034,498
pence
pence
pence
Basic adjusted earnings per ordinary share
7.9
9.1
30.0
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